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DJIA

The DJIA helps investors carefully track both short and long term trends in the DJIA in order to strategize their investments. One way to track the trends in the DJIA is to use a Monthly Moving Average Chart. This shows movement in the market in monthly increments. The long-term DJIA trends are measured in monthly increments of 5, 10, 20, 25, 30 and 50 year Moving Averages. The DJIA monthly averages are compared with long-term results to show investors which way the trend is heading.
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DJIA - Trends

The DJIA goes through short term and long term trends, or movement in market prices. When the DJIA trend is sending prices upward, it is called a bull market. When a downward trend occurs in the DJIA it is called a bear market. One of the most well known was the Crash of 1929, when the DJIA plummeted, ending a long bull market. Investors and DJIA analysts look at 1982 as the last great bull market.

DJIA - Movement

The Big Trends research team tracks movement in the DJIA, and recently pointed out that there was possible support for the Dow Industrials on the 300 Month Moving Average (25 year) on the long-term Monthly Chart.  Though not a commonly used measure, it can give an indication of movement. More commonly used is a long-term DJIA chart showing multiple monthly Moving Averages, which can show where the DJIA is currently.

DJIA – Bear Market

The DJIA can be affected by investor confidence or expectation, and during a recession the DJIA typically falls, as confidence is lowered. Some analysts believe that when the DJIA falls, it is not because of investor confidence, but it is adjusting to the mean of a bull market’s above average levels that could not be sustained.
DJIA – Bull Market
The DJIA can be described in terms of upward or downward trends. An upward trend is called a Bull Market. Another way of looking at movement is to examine bull market eras. The last bull market lasted approximately 25 years which lends support to the 20 to 30 year DJIA moving averages.
DJIA – Historic Market Movements
When tracking DJIA market movements, it appears the 10 year MA that supported the 2002 pullback has been broken. In addition, the 5 and 10 year MA could have a bearish crossover as the result of a “roll over” from uptrends. Other DJIA MA are still uptrending, so the big picture shows that profits can be made no matter which way the DJIA market moves.